CBU
Community Bank System, Inc.
$63.41
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 7.1% below fair value
You pay
$63.41
Bear
$46.89
Fair
$68.28
Bull
$81.00
Bear
$46.89
-26.1%
ROTCE 14.8% → 2.32x TBV
Fair
$68.28
+7.7%
ROTCE 19.8% → 3.37x TBV
Bull
$81.00
+27.7%
ROTCE 22.8% → 4.00x TBV
Key Value Driver
ROTCE (19.8%) vs. cost of equity (8.7%)
Implied Market Multiple
3.13x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $68.50 from 12 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $68.28 per share.
Warnings
Traditional cash flow models don't work well for banks — lending activity distorts how much cash the business actually generates.
Common valuation shortcuts don't apply here — for banks, interest payments are a core business cost, not overhead.
Dividend-based valuation: $27.78 (59% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Key Risks
- Book value quality matters as much as level — check loan loss reserves
- Interest rate sensitivity creates non-linear earnings surprises
- Insurance reserving is actuarial, not financial — errors emerge slowly